Correlation Between Grieg Seafood and Sogn Sparebank
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and Sogn Sparebank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grieg Seafood and Sogn Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood ASA and Sogn Sparebank, you can compare the effects of market volatilities on Grieg Seafood and Sogn Sparebank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grieg Seafood with a short position of Sogn Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Sogn Sparebank.
Diversification Opportunities for Grieg Seafood and Sogn Sparebank
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grieg and Sogn is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA and Sogn Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sogn Sparebank and Grieg Seafood is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grieg Seafood ASA are associated (or correlated) with Sogn Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sogn Sparebank has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Sogn Sparebank go up and down completely randomly.
Pair Corralation between Grieg Seafood and Sogn Sparebank
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 1.13 times less return on investment than Sogn Sparebank. In addition to that, Grieg Seafood is 1.21 times more volatile than Sogn Sparebank. It trades about 0.14 of its total potential returns per unit of risk. Sogn Sparebank is currently generating about 0.19 per unit of volatility. If you would invest 20,200 in Sogn Sparebank on September 2, 2024 and sell it today you would earn a total of 6,195 from holding Sogn Sparebank or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood ASA vs. Sogn Sparebank
Performance |
| Timeline |
| Grieg Seafood ASA |
| Sogn Sparebank |
Grieg Seafood and Sogn Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Sogn Sparebank
The main advantage of trading using opposite Grieg Seafood and Sogn Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, Sogn Sparebank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sogn Sparebank will offset losses from the drop in Sogn Sparebank's long position.| Grieg Seafood vs. Lery Seafood Group | Grieg Seafood vs. SalMar ASA | Grieg Seafood vs. Austevoll Seafood ASA | Grieg Seafood vs. Mowi ASA |
| Sogn Sparebank vs. Sparebanken Sor | Sogn Sparebank vs. SpareBank 1 stlandet | Sogn Sparebank vs. Holand og Setskog | Sogn Sparebank vs. Sparebank 1 Ringerike |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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